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Foreign aid as prize : incentives for a pro-poor policy

Sayanak, Tejashree (contributor); Lahiri, Sajal (contributor) - 2008

We develop a theoretical model of foreign aid to analyse a method of disbursement of aid which induces the recipient government to follow a more pro-poor policy than it otherwise would do. In our two-period model, aid is given in the second period and the volume of it depends on the level of...